Justia Insurance Law Opinion Summaries

A young man was seriously injured in a car accident while riding as a passenger. His expenses exceeded the amount covered by the at-fault driver’s insurance. He held an underinsured motorist (UIM) policy through State Farm on his own car, and his family (parents and sister) held four additional State Farm policies insuring other household vehicles, all with similar UIM coverage. State Farm paid him the UIM limit under his personal policy and under one of the family’s household policies, but denied his request to collect UIM benefits (“stack”) from the remaining three household policies. State Farm relied on an anti-stacking provision in all policies, which limited recoveries to one policy “purchased by one insured.” The company argued that his parents, as joint purchasers, counted as “one insured,” so stacking across their jointly purchased household policies was not permitted.The Superior Court in Maricopa County granted summary judgment for State Farm, finding the anti-stacking language valid and applicable. The Arizona Court of Appeals affirmed the result but reasoned that the young man’s parents, although married, were two insureds, and the anti-stacking provision still applied because they jointly purchased the policies. The appeals court also rejected the argument that the sister was an additional purchaser due to her reimbursing a parent for premium payments.The Supreme Court of the State of Arizona reviewed the statutory interpretation at issue. It held that, under Arizona’s UM/UIM statute, “purchased by one insured” refers to the named insured or insureds who jointly procure coverage, regardless of who pays premiums or community property considerations. When multiple named insureds (such as spouses) act together to purchase policies, they are treated as “one insured,” and anti-stacking provisions may limit recoveries accordingly. The Supreme Court vacated part of the appellate decision and affirmed summary judgment for State Farm. View "STATE FARM v BALZAN" on Justia Law

After being injured in a car accident caused by Andrew Clark, who was driving a vehicle owned by his mother Tracy Clark, Nadia Marin sued Andrew for negligence and Tracy for negligent entrustment. Marin suffered multiple injuries and eventually was diagnosed with complex regional pain syndrome after undergoing extensive medical treatment and surgeries. Before trial, Marin made a $2 million offer of judgment, which the Clarks did not accept. At trial, the Clarks conceded liability, and the jury was left to determine damages, ultimately awarding Marin over $2 million.In the Eighth Judicial District Court, the Clarks challenged the outcome on several grounds. They argued that the court did not allocate enough trial time for their defense, improperly allowed Marin to withdraw deemed admissions, and issued an unsupported jury instruction. The Clarks also moved for a new trial on the basis of alleged attorney misconduct. The district court denied their motion for a new trial, upheld the jury verdict, and awarded Marin expert and attorney fees, including the full amount of her contingency fee agreement. The court also granted Marin’s motion to assign the Clarks’ claims against their insurer to her in execution of the judgment.The Supreme Court of Nevada reviewed the case and affirmed the trial court’s judgment, denial of a new trial, award of expert fees, and the assignment of the Clarks’ claims against their insurer. The court concluded that the Clarks had a meaningful opportunity to present their defense and that the district court had not abused its discretion regarding the deemed admissions, jury instructions, or expert fee award. However, the Supreme Court reversed the attorney fee award, holding that post-offer attorney fees under NRCP 68 must be limited to work performed after the offer of judgment, not the entire contingency fee. The court remanded for reconsideration of attorney fees consistent with this clarification and overruled prior precedent to the extent it was inconsistent. View "Clark v. Marin" on Justia Law

In this case, a trust was established by Frank Garrett, Jr. in South Dakota in 2006, naming his wife as the beneficiary and a South Dakota bank as trustee. The trust applied for and obtained a $10 million life insurance policy on Frank's life, funded by a nonrecourse premium finance loan. After several years, the policy was surrendered to the lender, which then sold the policy in the secondary market. Eventually, Viva Capital Trust acquired the policy, paid the premiums, and received the death benefit after Frank died in 2019. Frank’s estate, administered by his son, challenged the transaction, claiming it was part of a stranger-originated life insurance (STOLI) scheme, violating South Dakota’s insurable interest statute and public policy against wagering on human life.The Circuit Court of the Second Judicial Circuit, Minnehaha County, reviewed cross-motions for summary judgment. The court granted summary judgment to Viva, finding that the trust was validly established, the insurance policy was properly issued and delivered to the trust, and the policy complied with South Dakota insurable interest requirements. The court also determined that the estate’s counterclaims, challenging the trust’s validity and seeking recovery of death benefits, were barred by the statute of repose, which prohibits such actions more than one year after the settlor’s death. The court awarded litigation costs to Viva.On appeal, the Supreme Court of the State of South Dakota affirmed the circuit court’s grant of summary judgment to Viva, holding that the estate’s counterclaims regarding the trust’s validity were barred by the statute of repose, and that the insurance policy complied with South Dakota’s insurable interest statutes. The Supreme Court also found no error in denying summary judgment to the estate. However, it reversed in part the award of costs and remanded for further proceedings to ensure only authorized costs were included. View "Viva Capital Trust V. Garrett" on Justia Law

A food manufacturing company purchased commercial general liability insurance policies from an insurer, with each policy providing coverage against bodily injuries from bacterial contamination. The policies defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and required the company to pay a $250,000 retained limit per occurrence before coverage would be triggered. In 2022, the company recalled certain peanut butter products due to potential salmonella contamination, resulting in thousands of consumer claims for bodily injury and property damage. The insurer denied coverage, asserting that each claimant’s exposure counted as a separate occurrence, but aggregated these exposures by production “lot,” meaning the company would need to pay the retained limit for each lot before the insurer’s obligation began.The United States District Court for the Northern District of Ohio reviewed cross-motions for summary judgment. The district court sided with the company, finding that the salmonella contamination constituted a single occurrence and deeming the Lot Endorsement ambiguous. The court granted summary judgment for the company and denied the insurer’s motion, then certified its order for interlocutory appeal and stayed the case.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s decision de novo. The court held that, under the insurance policies’ definition of occurrence and Ohio’s “cause” test, the salmonella contamination was the single occurrence. It also determined that the Lot Endorsement did not clearly create multiple occurrences and was ambiguous, requiring interpretation in favor of the insured. The court affirmed the district court’s judgment in favor of the company, holding that only one retained limit applied for all claims arising from the salmonella contamination. View "J.M. Smucker Co. v. Ace American Insurance Co." on Justia Law

A carpenter who managed his own construction business was involved in a multi-vehicle accident in September 2013, while driving a car owned by another individual. The accident, caused by another driver, resulted in significant injuries and financial losses for the plaintiff, who claimed over $75,000 in medical expenses and more than $250,000 in lost income. The plaintiff had a business insurance policy with Main Street America Assurance Company (MSAA) during the relevant period. The driver and owner of the vehicle that struck the plaintiff were insured by GEICO General Insurance Company.Previously, the plaintiff sued the at-fault driver and owner (the Mathieus) in Kent County Superior Court and later settled that case. In the present suit, the plaintiff brought claims against both GEICO and MSAA for breach of contract, breach of the implied covenant of good faith and fair dealing, and statutory bad faith refusal to settle. Both defendants moved to sever the bad faith and implied covenant claims and to stay discovery on those claims, which the Superior Court granted. The court also denied the plaintiff’s motion to compel additional document production from GEICO, pending resolution of summary judgment motions. Ultimately, the Superior Court granted summary judgment for both defendants.On appeal, the Supreme Court of Rhode Island affirmed the Superior Court’s judgments. The Court held that MSAA’s business insurance policy expressly excluded coverage for injuries arising from automobile use, so the plaintiff’s contract and related claims failed as a matter of law. As to GEICO, the Court found that Rhode Island law prohibits direct actions against an insurer under these circumstances, and the plaintiff had no contractual or third-party rights under the GEICO policy. The Court also concluded that the issues related to severance and discovery were moot given the disposition of the contract claims. View "Menge v. GEICO General Insurance Company" on Justia Law

After a hailstorm damaged its property, a food and resource center submitted a claim to its property insurer. The insurer hired an engineering company to inspect the property and report its findings. Following the inspection, the insured filed a lawsuit against the insurer for breach of contract and bad faith, and against its insurance agent for misrepresentation. Later, the insured amended its petition to add claims against the engineering company for tortious interference with contract and civil conspiracy, alleging the company’s inspection and reporting were biased to support the insurer’s position.The District Court of Payne County reviewed the engineering company’s motion to dismiss the claims against it. The court denied the motion, allowing the tortious interference and civil conspiracy claims to proceed. The engineering company petitioned for interlocutory review, and the district court certified its order, expressing that immediate appeal would materially advance the litigation’s resolution. The Supreme Court of the State of Oklahoma granted certiorari to consider whether the insured’s claims against the engineering company were legally viable.The Supreme Court of the State of Oklahoma held that the claims against the engineering company fail as a matter of law. The Court determined that, because the engineering company acted as a representative for the insurer when conducting the inspection, it cannot be liable for tortious interference with contract or civil conspiracy under Oklahoma law. The Court emphasized that such representatives are privileged in their actions and that the insurer’s duties are non-delegable. Accordingly, the Court reversed the district court’s judgment and remanded the matter for further proceedings consistent with its opinion. View "COMMUNITY RESOURCING, INC. v. BERKSHIRE HATHAWAY SPECIALTY INSURANCE" on Justia Law

A bus accident involving the Choctaw Nation resulted in a lawsuit seeking damages for deceased and injured passengers. At the time, the Nation was insured by three companies: Occidental Insurance Company, Hudson Insurance Company, and General Star Indemnity Company. Occidental paid its policy limits and was not involved in this litigation. Hudson and General Star both contributed to settlement payments and defense costs, each asserting that its policy was excess and the other was primary. General Star sought reimbursement from Hudson for settlement sums paid, arguing that Hudson’s policy was primary. Hudson contended its policy was excess and only liable after other coverage was exhausted.The District Court granted summary judgment to General Star, ordering Hudson to reimburse General Star for its payments. The court also awarded General Star prejudgment interest under 36 O.S. § 3629 (B) after a post-judgment motion. Hudson appealed, and the Court of Civil Appeals affirmed the district court’s rulings regarding policy status and the award of prejudgment interest, but reversed the requirement that judgment be paid within thirty days. Hudson then sought certiorari review from the Supreme Court of Oklahoma on the issues of policy characterization and prejudgment interest.The Supreme Court of the State of Oklahoma vacated the Court of Civil Appeals’ opinion. It affirmed the District Court’s grant of summary judgment in favor of General Star and denial of summary judgment to Hudson, holding that Hudson’s policy was primary and General Star’s was excess. However, the Supreme Court reversed the award of prejudgment interest, finding that Section 3629 (B) does not allow a prevailing insurer to recover prejudgment interest in a coverage dispute between insurers. The order of final judgment was also reversed, and the case was remanded for further proceedings. View "GENERAL STAR INDEMNITY CO. v. HUDSON INSURANCE CO." on Justia Law

The case centers on a legal-malpractice insurance dispute arising from a failed medical-malpractice lawsuit. Lauren Bridges, acting as guardian for her minor daughter, initially filed suit in Alaska state court, alleging negligence by healthcare providers that resulted in her child’s disabilities. The case was dismissed when Bridges’s attorney, McKeen & Associates, failed to respond to summary judgment motions. Bridges subsequently brought a legal-malpractice claim against McKeen. At the relevant times, McKeen held legal-malpractice policies from Maxum Indemnity Company, StarStone Specialty Insurance Company, and Landmark American Insurance Company. All insurers declined to defend or indemnify McKeen. McKeen settled with Bridges, assigning her its rights under the policies.Bridges filed suit in the United States District Court for the Eastern District of Michigan against all three insurers, seeking a declaratory judgment and damages for breach of contract. Maxum and Landmark moved to dismiss, and the district court granted their motions, finding the policies unambiguously excluded coverage. The district court also denied Bridges’s motion to amend her complaint to add bad-faith claims and, after Bridges and StarStone stipulated to dismissal, entered final judgment regarding Maxum and Landmark. Bridges appealed only the dismissal of her claims against Maxum and Landmark.The United States Court of Appeals for the Sixth Circuit reviewed the district court’s dismissal de novo. The court held that Maxum’s policy unambiguously required notification of potential malpractice claims during the policy period, which McKeen failed to do, precluding coverage. As to Landmark, the court found that the relevant “wrongful act” occurred before the retroactive date specified in the follow-form policy, excluding coverage. Bridges’s arguments regarding policy ambiguity and procedural fairness were rejected. The Sixth Circuit affirmed the district court’s dismissal of Bridges’s claims against both Maxum and Landmark. View "Bridges v. Maxum Indemnity Company" on Justia Law

A couple hired a mobile home transport company to move their mobile home to a new location. The company, Brown & Son, subcontracted the actual move to another individual, Jason Gaston. During transport, the home sustained significant damage when the wheels became stuck, and efforts to move it led to further harm. Before the move, the couple spoke with their insurance agent, who assured them their existing policies would cover any transport-related loss. However, after the damage, their insurers denied the claim, citing exclusions for damages incurred during transport.The couple then sued their insurers and their agent, Michelle Schaefer, for breach of contract, bad faith, and misrepresentation regarding their insurance coverage. They did not bring claims against Brown & Son or Gaston. In response, Schaefer, as a third-party plaintiff, sought contribution or indemnity from Brown & Son and Gaston, arguing that if she was found liable for the couple’s losses, those parties should share responsibility. The District Court of Oklahoma County granted summary judgment to Brown & Son, concluding that statutory changes in Oklahoma law had abolished joint and several liability and, by extension, the right to contribution in this context. The Oklahoma Court of Civil Appeals affirmed that decision.The Supreme Court of the State of Oklahoma reviewed the case on certiorari. The Court vacated the decision of the Court of Civil Appeals but affirmed the trial court’s grant of summary judgment to Brown & Son, though on different grounds. The Supreme Court held that contribution was unavailable because the alleged injuries caused by Brown & Son (physical damage to the mobile home) and Schaefer (losses from lack of insurance coverage) were not the same injury as required by statute. Therefore, Brown & Son and Schaefer were not jointly or severally liable for the same injury, and no right of contribution existed. View "RICHARDS v. FOREMOST INSURANCE CO." on Justia Law

Two individuals filed a lawsuit on behalf of themselves and a proposed class, alleging that a life insurance company’s “Trendsetter LB” term life insurance policy misrepresented its premium structure. The plaintiffs argued that policy language stating the annual premium was “excluding riders” and that additional accelerated death benefit riders were included at “no charge” was misleading. They claimed consumers were led to believe these extra benefits were free, when in fact the premium included undisclosed charges for these riders. The plaintiffs did not allege they were denied any promised benefits, but contended the policy failed to break down the cost of its bundled components, allegedly causing consumers to misunderstand their options and overpay compared to a more basic policy.The case began in Alameda County Superior Court. Plaintiffs sought class certification for claims under California’s Unfair Competition Law (UCL), focusing only on alleged misrepresentations in the policy’s standardized language. The trial court initially found ascertainability and numerosity met, but denied class certification for most claims, ruling that determining liability would require individualized inquiries into what information each customer received from agents or marketing materials. The court certified only a narrow claim regarding compliance with a statutory notice requirement, but later, at plaintiffs’ request, denied certification entirely when they clarified they did not intend to pursue that claim.The Court of Appeal of the State of California, First Appellate District, Division One, affirmed the trial court’s denial of class certification. The court held that the policy language was, at best, ambiguous and that resolving liability would depend not just on the form policy language but also on individualized evidence about communications with each purchaser. The court determined that common issues did not predominate and that the trial court did not abuse its discretion in denying certification. The judgment was affirmed. View "Guthrie v. Transamerica Life Ins. Co." on Justia Law